Tradelink Securities Ltd., Kolkata V. The ITO, WD-4(1), KOLKATA, Kolkata

ITA 914/KOL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1352 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 07-09-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 22-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Question of law
• Section: 147; 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI ABY. T. VARKEY, JM & SHRI M. BALAGANESH, AM ] I.T.A NOS. 914&915/KO L/2015 ASSESSMENT YEARS : 2004- 05 & 2005-06 TRADELINK SECURITIES LTD. -VS- ITO, WARD-4(1), KOLKATA [PAN: AAACT 9210 G] (APPELLANT) (RESPONDENT ) FOR THE APPELLANT : SHRI P. R. KOTHARI , FOR THE RESPONDENT : SHRI ARINDAM BHATTACHARJ EE, ADDL. CIT DATE OF HEARING : 12.03.2018 DATE OF PRONOUNCEMENT : 14.03.2018 ORDER PER BENCH: 1. THESE APPEALS BY THE ASSESSEE ARISE OUT OF THE COMMON ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-2, KOLKATA [IN SHORT THE LD CIT(A)] IN APPEAL NO.312/CIT(A)-2/(04-05)/14-15 & 317/CIT(A)-2/KOL/(2 005-06)/14-15 DATED 20.02.2015 AGAINST THE PENALTY ORDER PASSED BY THE ITO, WARD-4(1), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 21.06.2011 FOR THE ASSESSMENT YEARS 2004-05 & 2005-06 RESPECTIVELY. COMMON ISSUE TAKEN UP TOGETHER FOR THE SAKE OF CON VENIENCE. 2. THE ONLY COMMON ISSUE INVOLVED IN THESE APPEALS IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN UPHOLDING THE LEVY OF PENALTY U/S 271( 1)(C ) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE FACTS OF ASST YEAR 2004-05 ARE TAKEN UP FOR ADJUDICATION AND THE DECISION RENDERED THEREON WOULD APPLY WITH EQUAL FORCE TO ASST YEAR 2005-06 ALSO IN VIEW OF IDENTICAL FACTS EXCEPT WITH VARIANC E IN FIGURES. 2 ITA NOS.914&915/KOL/2015 TRADELINK SECURITIES LTD. A.YRS.2004-05&2005-06 2 3. THE ASSESSEE IS A NON-BANKING FINANCE COMPANY ( NBFC) CARRYING ON THE BUSINESS OF FINANCING AND TRADING IN SHARES AND SECURITIES A ND WAS REGISTERED AS SUCH BY THE RESERVE BANK OF INDIA. THE ASSESSEE FILED ITS RETU RN OF INCOME U/S 139(1) OF THE ACT ON 28.10.2004 DECLARING TOTAL INCOME OF RS 53,650/- FO R THE ASST YEAR 2004-05. THE LD AO OBSERVED THAT THE ASSESSEE HAD ADVANCED RS 95,00,00 0/- TO ONE M/S ISG TRADERS LTD AND DERIVED INTEREST INCOME FOR THE PERIOD 1.4.2003 TO 31.3.2004 AMOUNTING TO RS 19,00,000/-AND SINCE THE SAME WAS NOT DECLARED IN T HE RETURN, THE CASE WAS REOPENED U/S 147 OF THE ACT. THE LD AO PASSED AN ORDER U/S 143 (3) / 147 OF THE ACT ON 31.12.2010 WHEREIN THE INTEREST INCOME OF RS 19,00,000/- WAS A DDED. THE LD AO INITIATED PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE ACT. 4. THE EXPLANATION GIVEN BY THE ASSESSEE FOR THE AF ORESAID ADDITION WAS NOT ACCEPTED BY THE LD AO IN THE PENALTY PROCEEDINGS AN D THE LD AO IMPOSED PENALTY U/S 271(1)(C ) OF THE ACT IN THE SUM OF RS 9,97,500/-. THE ASSESSEE STATED THAT THE NON- RECOGNITION OF INTEREST INCOME OF RS 19,00,000/- WA S IN ACCORDANCE WITH THE PRUDENTIAL NORMS ISSUED BY RBI FOR INCOME RECOGNITION, WHICH I S BINDING ON THE ASSESSEE , BEING A NBFC. THE LD CITA HOWEVER DID NOT HEED TO THE SAID ARGUMENT OF THE ASSESSEE AND REDUCED THE LEVY OF PENALTY TO RS 6,65,000/- BEING 100% OF THE TAX SOUGHT TO BE EVADED AS AGAINST 150% LEVIED BY THE LD AO. AGGRIEVED, TH E ASSESSEE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS:- 1. AGAINST IMPOSITION OF PENALTY U/S 271(1)(C ): A. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LD. COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] ERRED IN SUSTAINING THE PENALTY IMPOSED BY LD. ASSESSING OFFICER (A/O) U/S 271(1)(C ) OF THE INCOME TAX ACT, 1961 TO THE EXTENT OF RS. 665000/-. B. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LD. CIT(A) ERRED IN IGNORING APPELLANTS CONTENTION OF APPLICABILITY OF CLAUSE(C ) OF EXPLANATION-4 TO SECTION 271(1) OF THE INCOME TA X ACT, 1961 IN THE INSTANT CASE FOR COMPUTATION OF THE QUANTUM OF TAX ALLEGEDL Y SOUGHT TO BE EVADED BY 3 ITA NOS.914&915/KOL/2015 TRADELINK SECURITIES LTD. A.YRS.2004-05&2005-06 3 THE APPELLANT WHILE CALCULATING PENALTY U/S 271(1)( C ) OF THE INCOME TAX ACT, 1961. C. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LD. CIT(A) OUGHT TO HAVE HELD THAT IN THE INSTANT CASE TAX ALLEGEDLY SOUGHT TO BE EVADED BY THE APPELLANT COMES TO NIL IN VIEW OF CL AUSE (C) OF EXPLANATION- 4 TO SECTION 271(1) OF THE INCOME TAX ACT, 1961. 5. BEFORE US, THE LD AR PLACED ON RECORD A COPY OF THE SHOW CAUSE NOTICE ISSUED U/S 274 OF THE ACT. A PERUSAL OF THE SAME SHOWS TH AT THE LD AO HAS NOT SPECIFIED AS TO WHETHER PENALTY PROCEEDINGS ARE BEING INITIATED FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE IR RELEVANT PORTION IN THE SHOW CAUSE NOTICE HAS NOT BEEN STRUCK OUT. THE LD AR DREW OUR ATTENTION TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HONBLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA C OTTON AND GINNING FACTORY (2013) 359 ITR 565 TOOK A VIEW THAT IMPOSING OF PENALTY U/ S 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT THE SHOW CAUSE NOTI CE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THE LD AR FURTHER BROUGHT TO OUR NOTICE THAT AS AGAINST THE DECISION OF THE HON BLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 A ND THE HONBLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 DISMISSED THE SLP PREFER RED BY THE DEPARTMENT. THE LD AR ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.01.2017 WHEREIN THE HONBLE BOMBAY HIGH COURT FOLLOWING THE DECISIO N OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNATHA COTTON AND G INNING FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON DEFECTIVE SHOW CAUSE NOTICE WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED . OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTA CHARYA VS ACIT IN ITA 4 ITA NOS.914&915/KOL/2015 TRADELINK SECURITIES LTD. A.YRS.2004-05&2005-06 4 NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THE TRIBUNAL. 6. THE LD. DR SUBMITTED THAT IT IS NOT MANDATORY TO SPECIFY THE CHARGE IN THE SHOW CAUSE NOTICE U/S 274 OF THE ACT. IN THIS REGARD HE PLACED RELIANCE ON CERTAIN JUDICIAL PRONOUNCEMENTS. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. SIMILA R SUBMISSIONS MADE BY THE LD. DR IN THE CASE OF SHRI JEETMAL CHORARIA VS ACIT IN ITA NO.956/KOL/2016 ORDER DATED 01.12.2017 AND THIS TRIBUNAL DEALT WITH THIS SIMILA R ARGUMENTS OF THE LD. DR IN THE FOLLOWING PARAGRAPHS : 7. THE LEARNED DR SUBMITTED THAT THE HONBLE CA LCUTTA HIGH COURT IN THE CASE OF DR.SYAMAL BARAN MONDAL VS. CIT (2011) 244 CTR 63 1 (CAL) HAS TAKEN A VIEW THAT SEC.271 DOES NOT MANDATE THAT THE RECORDING OF SATISFACTION ABOUT CONCEALMENT OF INCOME MUST BE IN SPECIFIC TERMS AND WORDS AND THAT SATISFACTION OF AO MUST REFLECT FROM THE ORDER EITHER WITH EXPRESSE D WORDS RECORDED BY THE AO OR BY HIS OVERT ACT AND ACTION. IN OUR VIEW THIS DECI SION IS ON THE QUESTION OF RECORDING SATISFACTION AND NOT IN THE CONTEXT OF SP ECIFIC CHARGE IN THE MANDATORY SHOW CAUSE NOTICE U/S.274 OF THE ACT. THEREFORE RE FERENCE TO THIS DECISION, IN OUR VIEW IS NOT OF ANY HELP TO THE PLEA OF THE REVENUE BEFORE US. 8. THE LEARNED DR RELIED ON THREE DECISIONS OF MU MBAI ITAT VIZ., (I) DHANRAJ MILLS PVT. LTD. VS. ACIT ITA NO.3830 & 3833/MUM/200 9 DATED 21.3.2017; (II) EARTHMOVING EQUIPMENT SERVICE CORPORATION VS. DCIT 22(2), MUMBAI, (2017) 84 TAXMANN.COM 51 (III) MAHESH M.GANDHI VS. ACIT VS. A CIT ITA NO.2976/MUM/2016 DATED 27.2.2017. RELIANCE WAS PLA CED ON TWO DECISIONS OF THE HONBLE BOMBAY HIGH COURT VIZ., (I) CIT VS. KAUSHAL YA 216 ITR 660(BOM) AND (II) M/S.MAHARAJ GARAGE & CO. VS. CIT DATED 22.8.20 17. THIS DECISION WAS REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNE D DR. THIS IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED. HOWEVER A GIST OF THE RATIO LAID DOWN IN THE DECISION HAS BEEN GIVEN IN THE WRI TTEN NOTE FILED BEFORE US. 9. IN THE CASE OF CIT VS. KAUSHALYA (SUPRA), THE H ONBLE BOMBAY HIGH COURT HELD THAT SECTION 274 OR ANY OTHER PROVISION IN THE ACT OR THE RULES, DO ES NOT EITHER MANDATE THE GIVING OF NOTICE OR ITS ISSUANCE IN A P ARTICULAR FORM. PENALTY PROCEEDINGS ARE QUASI-CRIMINAL IN NATURE. SECTION 274 CONTAINS THE PRINCIPLE OF 5 ITA NOS.914&915/KOL/2015 TRADELINK SECURITIES LTD. A.YRS.2004-05&2005-06 5 NATURAL JUSTICE OF THE ASSESSEE BEING HEARD BEFORE LEVYING PENALTY. RULES OF NATURAL JUSTICE CANNOT BE IMPRISONED IN ANY STRAIGHT-JACKET FORMULA. FOR SUSTAINING A COMPLAINT OF FAILURE OF THE PRINCIPLES OF NATURAL J USTICE ON THE GROUND OF ABSENCE OF OPPORTUNITY, IT HAS TO BE ESTABLISHED THAT PREJUDIC E IS CAUSED TO THE CONCERNED PERSON BY THE PROCEDURE FOLLOWED. THE ISSUANCE OF N OTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSA L TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DO NE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF THE INACCURAT E PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE ITAT MUMBAI BENCH IN THE CASE OF DHANRAJ MILLS PVT.LTD. (SUPRA) FOLLOWED THE DECISION RENDERED BY THE JURISDICTIONAL HONBLE BOMBAY HIGH COURT IN THE CASE OF KAUSHALYA (SUPRA) AND CHOSE NOT TO FOLLOW DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CAS E OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA). RELIANCE WAS ALSO PLACED BY THE ITAT MUMBAI IN THIS DECISION ON THE DECISION OF HONBLE PATNA HIGH COUR T IN THE CASE OF CIT V. MITHILA MOTOR 'S (P.) LTD. [1984] 149 ITR 751 (PATNA) WHEREIN IT WAS HELD THAT UNDER SECTION 274 OF THE INCOME-TAX ACT, 1961, ALL THAT IS REQUIRED IS THAT THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO SHOW CAU SE. NO STATUTORY NOTICE HAS BEEN PRESCRIBED IN THIS BEHALF. HENCE, IT IS SUFFIC IENT IF THE ASSESSEE WAS AWARE OF THE CHARGES HE HAD TO MEET AND WAS GIVEN AN OPPORTU NITY OF BEING HEARD. A MISTAKE IN THE NOTICE WOULD NOT INVALIDATE PENALTY PROCEEDINGS. 10. IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE C ORPORATION (SUPRA), THE ITAT MUMBAI DID NOT FOLLOW THE DECISION RENDERED IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) FOR THE REASON THAT PENALTY IN THAT CASE WAS DELETED FOR SO MANY REASONS AND NOT SOLELY ON THE BASIS OF DEFECT IN SHOW CAUSE NOTICE U/S.274 OF THE ACT. THIS IS NOT FACTUALLY CORRECT. ONE OF THE PARTIES BEFORE THE GROUP OF ASSESSEES BEFORE THE KARNATAKA HIGH COURT IN THE CA SE OF MANJUNATHA COTTON & GINNING (SUPRA) WAS AN ASSESSEE BY NAME M/S.VEERABH ADRAPPA SANGAPPA & CO., IN ITA NO.5020 OF 2009 WHICH WAS AN APPEAL BY THE REVENUE. THE TRIBUNAL HELD THAT ON PERUSAL OF THE NOTICE ISSUED UNDER SECTION 271(1)(C) OF THE ACT, IT IS CLEAR THAT IT IS A STANDARD PROFORMA USED BY THE ASSESSIN G AUTHORITY. BEFORE ISSUING THE NOTICE THE INAPPROPRIATE WORDS AND PARAGRAPHS WERE NEITHER STRUCK OFF NOR DELETED. THE ASSESSING AUTHORITY WAS NOT SURE AS TO WHETHER SHE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD EITHER CONCEALED IT S INCOME OR HAS FURNISHED INACCURATE DETAILS. THE NOTICE IS NOT IN COMPLIANCE WITH THE REQUIREMENT OF THE PARTICULAR SECTION AND THEREFORE IT IS A VAGUE NOTI CE, WHICH IS ATTRIBUTABLE TO A PATENT NON APPLICATION OF MIND ON THE PART OF THE A SSESSING AUTHORITY. FURTHER, IT HELD THAT THE ASSESSING OFFICER HAD MADE ADDITIONS UNDER SECTION 69 OF THE ACT BEING UNDISCLOSED INVESTMENT. IN THE APPEAL, THE SA ID FINDING WAS SET-ASIDE. BUT ADDITION WAS SUSTAINED ON A NEW GROUND, THAT IS UND ER VALUATION OF CLOSING STOCK. SINCE THE ASSESSING AUTHORITY HAD INITIATED PENALTY PROCEEDINGS BASED ON THE ADDITIONS MADE UNDER SECTION 69 OF THE ACT, WHICH W AS STRUCK DOWN BY THE 6 ITA NOS.914&915/KOL/2015 TRADELINK SECURITIES LTD. A.YRS.2004-05&2005-06 6 APPELLATE AUTHORITY, THE INITIATED PENAL PROCEEDING S, NO LONGER EXISTS. IF THE APPELLATE AUTHORITY HAD INITIATED PENAL PROCEEDINGS ON THE BASIS OF THE ADDITION SUSTAINED UNDER A NEW GROUND IT HAS A LEGAL SANCTUM . THIS WAS NOT SO IN THIS CASE AND THEREFORE, ON BOTH THE GROUNDS THE IMPUGNED ORD ER PASSED BY THE APPELLATE AUTHORITY AS WELL AS THE ASSESSING AUTHORITY WAS SE T-ASIDE BY ITS ORDER DATED 9TH APRIL, 2009. AGGRIEVED BY THE SAID ORDER, THE REVEN UE FILED APPEAL BEFORE HIGH COURT. THE HONBLE HIGH COURT FRAMED THE FOLLOWING QUESTION OF LAW IN THE SAID APPEAL VIZ., 1. WHETHER THE NOTICE ISSUED UNDER SEC TION 271(1)(C) IN THE PRINTED FORM WITHOUT SPECIFICALLY MENTIONING WHETHER THE PR OCEEDINGS ARE INITIATED ON THE GROUND OF CONCEALMENT OF INCOME OR ON ACCOUNT OF FU RNISHING OF INACCURATE PARTICULARS IS VALID AND LEGAL? 2. WHETHER THE PROC EEDINGS INITIATED BY THE ASSESSING AUTHORITY WAS LEGAL AND VALID? THE HONB LE KARNATAKA HIGH COURT HELD IN THE NEGATIVE AND AGAINST THE REVENUE ON BOTH THE QUESTIONS. THEREFORE THE DECISION RENDERED BY THE ITAT MUMBAI IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE CORPORATION (SUPRA) IS OF NO ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. 11. IN THE CASE OF M/S.MAHARAJ GARAGE & CO. VS. CI T DATED 22.8.2017 REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNED DR, WH ICH IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED, THE SAME PROPOSITION AS WAS LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT .KAUSHALYA (SUPRA) APPEARS TO HAVE BEEN REITERATED, AS IS EVIDENT FROM THE EXT RACTS FURNISHED IN THE WRITTEN NOTE FURNISHED BY THE LEARNED DR BEFORE US. 12. IN THE CASE OF TRISHUL ENTERPRISES ITA NO.384 & 385/MUM/2014, THE MUMBAI BENCH OF ITAT FOLLOWED THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA). 13. IN THE CASE OF MAHESH M.GANDHI (SUPRA) THE MUM BAI ITAT THE ITAT HELD THAT THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE MANJUNATHA COTTON & GINNING (SUPRA) WILL NOT BE APPLICABLE TO THE FAC TS OF THAT CASE BECAUSE THE AO IN THE ASSESSMENT ORDER WHILE INITIATING PENALTY PR OCEEDINGS HAS HELD THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AND ME RELY BECAUSE IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT, THERE IS NO MENTIO N WHETHER THE PROCEEDINGS ARE FOR FURNISHING INACCURATE PARTICULARS OR CONCEALING PARTICULARS OF INCOME, THAT WILL NOT VITIATE THE PENALTY PROCEEDINGS. IN THE PRESENT CASE THERE IS NO WHISPHER IN THE ORDER OF ASSESSMENT ON THIS ASPECT. WE HAVE POINTE D OUT THIS ASPECT IN THE EARLIER PART OF THIS ORDER. HENCE, THIS DECISION WILL NOT BE OF ANY ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. EVEN OTHERWISE THIS DECISION DOES NOT FOLLOW THE RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN THE CAS E OF MANJUNATHA COTTON & GINNING (SUPRA) IN AS MUCH AS THE RATIO LAID DOWN I N THE SAID CASE WAS ONLY WITH REFERENCE TO SHOW CAUSE NOTICE U/S.274 OF THE ACT. THE HONBLE COURT DID NOT LAY 7 ITA NOS.914&915/KOL/2015 TRADELINK SECURITIES LTD. A.YRS.2004-05&2005-06 7 DOWN A PROPOSITION THAT THE DEFECT IN THE SHOW CAUS E NOTICE WILL STAND CURED IF THE INTENTION OF THE CHARGE U/S.271(1) (C ) IS DISCERNI BLE FROM A READING OF THE ASSESSMENT ORDER IN WHICH THE PENALTY WAS INITIATED . 14. FROM THE AFORESAID DISCUSSION IT CAN BE SEEN T HAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIG H COURT IS THAT ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING TH E ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS T O WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIK ING OF THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUN AL BENCHES AT MUMBAI AND PATNA BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL B ENCHS AT BANGALORE HAVE TO FOLLOW THE DECISION OF THE HONBLE KARNATAKA HIGH C OURT. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JURISDICTIONS ARE CONCERNED, THER E ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE RENDERED BY THE HONBLE K ARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) AND OTH ER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA. IT IS SE TTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOU RABLE TO THE ASSESSEE HAS TO BE FOLLOWED. WE THEREFORE PREFER TO FOLLOW THE VIEW E XPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTT ON & GINNING (SUPRA). 8. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NO TICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIK E OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSI TION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD AR WHICH IS BASED ON THE DECISIO NS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE THEREFORE HOLD TH AT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DI RECTED TO BE CANCELLED. 9. THE LD AR PLACED ON RECORD THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASST YEARS 2004-05 AND 2005-06 WHEREIN THE QUAN TUM ADDITION HAS BEEN DELETED BY THIS TRIBUNAL IN ITA NOS. 426 & 427/KOL/2015 DATED 26.12.2017 , WHEREIN THE QUANTUM ADDITION HAS BEEN DELETED BY THIS TRIBUNAL BY PLACI NG RELIANCE ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS VASI STH CHAY VYAPAR REPORTED IN 330 8 ITA NOS.914&915/KOL/2015 TRADELINK SECURITIES LTD. A.YRS.2004-05&2005-06 8 ITR 440 (DEL). WE FIND THAT THIS DECISION OF HONB LE DELHI HIGH COURT HAS BEEN RECENTLY APPROVED BY THE HONBLE SUPREME COURT IN T HE VERY SAME CASE REPORTED IN (2018) 90 TAXMANN.COM 365 (SC). HENCE WHEN THE QU ANTUM IS DELETED, THERE CANNOT BE ANY LEVY OF PENALTY U/S 271(1)(C ) OF THE ACT. HENCE THE PENALTY LEVIED BY THE LD AO DESERVES TO BE CANCELLED ON ALL GROUNDS. ACCORDINGL Y, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 10. IN THE RESULT THE APPEALS OF THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED IN THE COURT ON 14.03.2018 SD/- SD/- [A.T. VARKEY] [ M.BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 14 .03.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. TRADELINK SECURITIES LTD., 23A, NETAJI SUBHASH ROAD, (1 ST FLOOR), KOLKATA-700001 2. ITO, WARD-4(1), KOLKATA, AAYAKAR BHAWAN, P-7, CH OWRINGHEE SQUARE, KOLKATA- 700069. 3. C.I.T(A)- , KOLKATA 4. C.I.T.- K OLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVAT E SECRETARY HEAD OF OFFICE/D.D.O., ITAT, KOLKATA BENCHE S 9 ITA NOS.914&915/KOL/2015 TRADELINK SECURITIES LTD. A.YRS.2004-05&2005-06 9